KRA recovers Sh330 million from county government suppliers

The Kenya Revenue Authority (KRA) has recovered Sh330 million tax from various suppliers trading with county governments.

The taxes comprising of the Value Added Tax (VAT), Income Tax, and withholding tax, was recovered over a period of three years from various suppliers following investigations by the KRA.

Commissioner for Investigations and Enforcement Mr. David Yego said the authority has in the past three years received intelligence reports of tax evasion by various business entities trading with county governments, which was acted on.

“Following investigations, some suppliers agreed to pay taxes due while others have been charged in court. Others have opted to seek redress at the Tax Appeals Tribunal (TAT) and while some have since engaged the Authority with the aim of settling the cases amicably as per the provisions of the Tax and Customs Laws. We are confident that additional taxes shall be recovered from these suppliers,” said Yego.

The Authority has further established that tax evasion by county suppliers is mainly done through the use of fictitious invoices to inflate costs and failure by County Governments to submit taxes withheld from the suppliers and employees among other non-compliance issues like failure to file returns and filing of nil returns even after
earning taxable income. Further investigations are ongoing in this regard.

“Over the investigative period KRA carried out risk analysis and established that despite the increase in expenditure by the County Governments on supplies of goods and services, there was no corresponding increase in tax payments by the suppliers in terms of Income Tax, Valued Added Tax and withholding taxes”, said Yego.